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Charlene is evaluating a captal budgeting project that should last for 4 years. The project requires $775,000 of equipment and is eligible for 100% bonus

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Charlene is evaluating a captal budgeting project that should last for 4 years. The project requires $775,000 of equipment and is eligible for 100% bonus depredation. 5 she is ansure whether immediately expensing the equipment or using straight-line depreciation is berter for the analysis. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the haif-year convention for the straight-line method). The company's wacc is 10%, and its tax rate is 20%. a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Round your answers to the nearest dollac. b. Which depreciation method would produce the higher NPN? How much higher would the NPV be under the preferted method Do not round intermediate calculations. Round your answer to the nearest dollar. 5

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